Disadvantage of Bitcoin

[Rockstarguy]

We all know Bitcoin has much benefits and advantages to the modern society. Some mate like me may not know some little disadvantage of Bitcoin.

Disadvantages

Like any currency, there are disadvantages associated with using Bitcoin:

Bitcoins Are Not Widely Accepted
Bitcoins are still only accepted by a very small group of online merchants. This makes it unfeasible to completely rely on Bitcoins as a currency. There is also a possibility that governments might force merchants to not use Bitcoins to ensure that users’ transactions can be tracked.

Wallets Can Be Lost
If a hard drive crashes, or a virus corrupts data , and the wallet file is corrupted, Bitcoins have essentially been “lost”. There is nothing that can done to recover it. These coins will be forever orphaned in the system. This can bankrupt a wealthy Bitcoin investor within seconds with no way form of recovery. The coins the investor owned will also be permanently orphaned.

Bitcoin Valuation Fluctuates
The value of Bitcoins is constantly fluctuating according to demand. As of June 2nd 2011, one Bitcoins was valued at $9.9 on a popular bitcoin exchange site. It was valued to be less than $1 just 6 months ago. This constant fluctuation will cause Bitcoin accepting sites to continually change prices. It will also cause a lot of confusion if a refund for a product is being made. For example, if a t shirt was initially bought for 1.5 BTC, and returned a week later, should 1.5 BTC be returned, even though the valuation has gone up, or should the new amount (calculated according to current valuation) be sent? Which currency should BTC tied to when comparing valuation? These are still important questions that the Bitcoin community still has no consensus over.

No Buyer Protection
When goods are bought using Bitcoins, and the seller doesn’t send the promised goods, nothing can be done to reverse the transaction. This problem can be solved using a third party escrow service like ClearCoin, but then, escrow services would assume the role of banks, which would cause Bitcoins to be similar to a more traditional currency.

Risk of Unknown Technical Flaws
The Bitcoin system could contain unexploited flaws. As this is a fairly new system, if Bitcoins were adopted widely, and a flaw was found, it could give tremendous wealth to the exploiter at the expense of destroying the Bitcoin economy.

Built in Deflation
Since the total number of bitcoins is capped at 21 million, it will cause deflation. Each bitcoin will be worth more and more as the total number of Bitcoins maxes out. This system is designed to reward early adopters. Since each bitcoin will be valued higher with each passing day, the question of when to spend becomes important. This might cause spending surges which will cause the Bitcoin economy to fluctuate very rapidly, and unpredictably.

No Physical Form
Since Bitcoins do not have a physical form, it cannot be used in physical stores. It would always have to be converted to other currencies. Cards with Bitcoin wallet information stored in them have been proposed, but there is no consensus on a particular system. Since there would be multiple competing systems, merchants would find it unfeasible to support all Bitcoin cards, and therefore users would be forced to convert Bitcoins anyway, unless a universal system is proposed and implemented.

No Valuation Guarantee
Since there is no central authority governing Bitcoins, no one can guarantee its minimum valuation. If a large group of merchants decide to “dump” Bitcoins and leave the system, its valuation will decrease greatly which will immensely hurt users who have a large amount of wealth invested in Bitcoins. The decentralized nature of bitcoin is both a curse and blessing.
 https://cs.stanford.edu/people/eroberts/cs181/projects/2010-11/DigitalCurrencies/disadvantages/index.html

[Charles-Tim]

You really need to learn more about bitcoin because your article is completely flawed and inaccurate.

Bitcoins Are Not Widely Accepted
Bitcoins are still only accepted by a very small group of online merchants. This makes it unfeasible to completely rely on Bitcoins as a currency.

Most people that buy bitcoin see it as an asset, that is enough and the reason it is superior to fiat as it is an appreciative asset unlike Fiat that are constantly devalued by the government. The reliability we need is the safety of the blockchain and the wallet we are using, that is why we should use reliable noncustododial wallet like Electrum while cold wallets are the safest, like the Trezor or Electrum cold wallet storage.

There is also a possibility that governments might force merchants to not use Bitcoins to ensure that users’ transactions can be tracked.

Bitcoin is censorship resistant, it can not be centrally controlled, if you are making use of exchanges, you have no full control over your Bitcoin, if you are using noncustododial wallet, you have your seed phrase that generates you your private key, you have the full control over your coin, and this nullifies this your comment.

Wallets Can Be Lost

Store your seed phrase offline, triplicating it is not bad, save each copy (not together) in three locations, store them in a place that is resistant to attackers and damages.

Bitcoin Valuation Fluctuates

That means you are just one of the people that know nothing about Bitcoin, if the price is decreasing, do not sell, leave it, the price will increase back, reach all-time-high again and you will gain. Bitcoin is getting attraction from people and institutions. Do not be surprised again when bitcoin reach all-time-high again and again.

Risk of Unknown Technical Flaws

Which flaws? Mention one. Do not compare the blockchain and nodes to the traditional system that are attacked with malware which makes them not to be perfect at all. Bitcoin blockchain is the strongest blockchain in the world with the highest hashrate generated by miners, so do not expect 51% attack, the nodes will also completely invalidated invalid transactions.

No Buyer Protection
When goods are bought using Bitcoins, and the seller doesn’t send the promised goods, nothing can be done to reverse the transaction. This problem can be solved using a third party escrow service like ClearCoin, but then, escrow services would assume the role of banks, which would cause Bitcoins to be similar to a more traditional currency.

When you know that already, you should not send Bitcoin to a wrong address, also make use of escrow is still perfect in this regard. Also, there are many fiat transactions that once sent, that is all, and the fiat can not be recovered. I am also very tired of fiat dispense error and many other errors related to fiat transactions.

No Physical Form

When it is not needed, the intrinsic value is all that matters. And if you like you can go for casascius physical bitcoins.

No Valuation Guarantee

This is out of point, the coin that is reaching all-time-high, the most successful asset of the last decade, and yet all-time-high guaranteed. I think you need to learn more about Bitcoin before making any comment.